Children's Ministry Leader and Payroll Taxes?

by Carrie

Question regarding Children's Ministry leader and payroll taxes:

I am a bookkeeper for a small church and we are hiring a children's ministry director this year.

Are the wages for this person treated like the minister's except for the housing allowance?

Should they be reported on a W-2 or 1099? Should payroll taxes be withheld?

vickey's relpy

He would have to met the IRS qualifications of a minister to have the dual tax status of a qualifying minister. If he does not meet all of the qualifications, you would treat his wages as employee wages with the appropriate taxes withheld and matched. The wages would be reported on a W-2.

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If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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